Migration with Pension Reform Expectations

21 Pages Posted: 17 Dec 2018

See all articles by Marek Góra

Marek Góra

Warsaw School of Economics (SGH); IZA Institute of Labor Economics

Anna Ruzik-Sierdzińska

Warsaw School of Economics (SGH)

Abstract

Pension reforms, which imply a reduction in the generosity of pension benefits, are becoming widespread in response to the demographic transition. The scale, the timing, and the pace of these reforms vary across countries. In this theoretical article, authors analyse individual migration decisions, by adding a component linked to the expected old-age pension benefits in sending and receiving countries in two cases: when the pension system rules are known, and when there is a risk of the pension systems reforms. The results indicate that when individuals fail to take future pension wealth into account, they can make sub-optimal migration decisions.

Keywords: migration decision, pension benefits, pension reforms, institutional uncertainty

JEL Classification: F22, J24, J26, J61

Suggested Citation

Góra, Marek and Ruzik-Sierdzińska, Anna, Migration with Pension Reform Expectations. IZA Discussion Paper No. 11960, Available at SSRN: https://ssrn.com/abstract=3301713 or http://dx.doi.org/10.2139/ssrn.3301713

Marek Góra (Contact Author)

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Anna Ruzik-Sierdzińska

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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